Have you had a Bankruptcy, Foreclosure, Short Sale or Deed in Lieu of Foreclosure and are wondering how long you have to wait before you can obtain a new home loan? Here are the guidelines as of Februrary 2011, which I verified with a loan officer friend.

Of course, every rule is made to be broken and under the right circumstances of reestablished credit and an underwriter waiver/exception you may be able to qualify for a new home loan in less time than the general seasoning periods. A seasoning period, in this case, is the mortgage industry term for waiting period.

BANKRUPTCY

♦ Chapter 7- FHA & VA require two years seasoning. Conventional loans now require four years seasoning. If the bankruptcy has been discharged at least one year and less than two years, it is possible to obtain an FHA or VA mortgage. It must be documented that the bankruptcy was due to an extenuating circumstance. For example a loss of job, acts of nature, medical emergencies, etc. USDA Rural Development generally requires three years seasoning after discharge, but may make an exception before that with reestablished credit and an underwriter "waiver".

♦ Chapter 13- This type of filing indicates an effort to pay creditors. FHA and VA will allow borrowers to purchase a home after one year from the date of discharge if the payments have been made on time and their payment performance has been satisfactory. Conventional loans require 2 years from discharge date of 4 years from dismissal date. USDA Rural Development generally requires three years seasoning after dismissal, but may make an exception before that with reestablished credit and an underwriter "waiver".

SHORT SALES

♦ Conventional and VA loans require two years minimum seasoning on a short sale.

♦ FHA will allow borrowers to obtain a new mortgage after a short sale if: The borrower was current on their mortgage and other debts at the time of the short sale and proceeds from the short sale serve as payment in full.

♦ FHA will not allow borrowers to obtain a new mortgage after a short sale if: The borrower is taking advantage of a declining market or are purchasing a similar or superior property at a reduced price within commuting distance.

♦ USDA Rural Development generally requires three years seasoning after discharge, but may make an exception before that with reestablished credit and an underwriter "waiver".

FORECLOSURE or DEED IN LIEU OF FORECLOSURE

♦ FHA requires three years seasoning on a borrower with a previous foreclosure or deed -in-lieu of foreclosure. If extenuating circumstances can be documented exceptions can be granted.

♦ Conventional loans now require a seven year time period from completion date.

♦VA loans require a two year seasoning period before acquiring a new VA loan. If the foreclosure was on a VA loan then the applicant may not have full entitlement available for the new loan.

♦ USDA Rural Development generally requires three years seasoning after discharge, but may make an exception before that with reestablished credit and an underwriter "waiver".

Contact me anytime if I can help in any way. I'd love to help you find your new home!

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Cheryl is the most amazing agent to work with! Since I have worked with her I have recommended her every single time a friend of mine mentioned plans to buy a house. Cheryl is kind and understands her customers needs. Not many agents care about the purchaser actually being happy and Cheryl makes sure her clients are! She went above and beyond for me so that I could move into my house on the day planned, traveling more in one day than anyone could expect from her- just to get my paperwork filed. She was always patient and honest when she felt a house didn't fit my lifestyle and I truly love the decision I have made. Cheryl is more than an agent, she is the person you can trust trhoughout the process - a true partner. I would recommend her any day!Kirsten Hobley

We actually starting looking for realtors starting in 2010 and through it all we found the best in realty. Cheryl Powell answered all of our questions even though we were just looking at that time. In 2012, we contacted Cheryl for her assistance in purchasing a home. We needed someone who knew about the programs out there to assist us here in North Carolina. Cheryl provided us service from beginning to the time of closing. After closing we still like to stay in contact to let her know we are thinking of her. When anyone states they are in the process or need information about purchasing, I refer Cheryl Powell.K. McGriff